America's postage bill is likely in the mail Public's deep pockets targeted

June 15, 1993|By Los Angeles Times

WASHINGTON -- Forty-seven thousand budget-related resignations later, the U.S. Postal Service is searching for a new way put its finances in order, and the solution is likely to affect just about everyone who uses the mail.

Despite last summer's $2 billion restructuring plan that slashed 30,000 jobs and led to the early retirement of more than 47,000 workers, the Clinton administration's budget calls for the postal service to "contribute" another $2 billion in the name of deficit reduction.

Postmaster General Marvin T. Runyon contends that with little fat now remaining in middle management ranks -- which already have been severely trimmed -- he has been left with few options.

The most likely sources of new revenue appear to be raising the reduced postage rates enjoyed by more than 400,000 nonprofit organizations nationwide and increasing regular residential and commercial postal rates ahead of schedule.

Upon taking office as head of the independent agency last summer, the postmaster general was faced with an inefficient and bloated system of management, unhappy workers and, perhaps most important, a projected $2 billion deficit in fiscal year 1993.

Mr. Runyon immediately unveiled a proposal to dramatically cut costs and reshape upper management into a more corporate-like structure, eliminating 30,000 management and support positions.

The administration has targeted the postal service as a ready source of cash, seeking a combination of one-time and annual budget cuts totaling $2 billion.

Since 1951, Congress has paid the postal service's overhead costs for the mail of non-profit groups, requiring the groups to pay only the direct costs of their mail -- a savings of 5 to 7 cents a letter.

The service now costs the government $531 million annually.

The Clinton budget proposal calls for the elimination of the subsidy for all groups except the blind and those voting absentee from overseas, forcing the postal service to make up the more than $450 million annual difference.

Under the plan, the postal service also will be charged a one-time fee of $1 billion for an apparent miscalculation in 1990 of retired workers' health costs.

Although Mr. Runyon has warned of the possibility of layoffs or even cutting back on mail delivery, a compromise may resolve the issue.

The costs of the non-profit mailers' subsidy apparently will be split between the non-profit organizations and commercial/residential mailers.

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